Explanation

The Purchase Ledger Control Account tracks all transactions with suppliers (creditors). It follows double-entry principles: credit entries increase what we owe, and debit entries decrease it.

Looking at the account structure: The credit side shows the opening balance (₦5,000 owed to suppliers) and purchases on credit (₦30,000). The debit side shows payments and reductions – cash paid (₦15,000), bills payable issued (₦3,000), discounts received (₦2,500), returns to suppliers (₦1,500), and contra entries (₦1,200).

The ₦11,800 appears as “Balance c/d” on the debit side. This is the closing balance that will be carried forward to the next period. Since it balances the credit side, it represents the net amount still owed to creditors at period end.

In simple terms: After all payments and adjustments, the business still owes ₦11,800 to its suppliers. This is a liability that will appear on the balance sheet.